NRI Success Stories

An intrepid breed of Indian entrepreneurs in Silicon Valley are making a killing.

Hotmail's Sabeer Bhatia: "the best piece of advice someone gave to me was that the biggest risk in life is not to take a risk at all."

What could Bill Gates, the richest man in the world and acknowledged High Priest of Hi-tech, want so badly that he would shell out $300 to $400 million for it?

Hotmail, a company created by Sabeer Bhatia, a 27-year-old Indian from Bangalore and his partner Jack Smith. Recalls Bhatia, who came to America as a student to study at Cal-Tech and Stanford: "We started out very small with just two people with a great idea."

The premise behind Hotmail - free e-mail for everyone all over the world - was so revolutionary that it just had to catch on. While there are other free e-mail services, such as Juno, Hotmail is different in that you don't need to download a special software and install it in the computer to access the e-mail.

Bhatia says, "In fact we solved the very problem that companies such as Juno or AOL create, in that we do not restrict individuals to access their e-mail from just the computer on which the software is installed but literally allow for global access. You can go to any computer which has a web browser and access your e-mail. You could do it as easily in India as here or any other country in the world."

According to Bhatia, Hotmail now has a 12 million subscriber lead over its competitors. Last December Gates' company, the mammoth Microsoft, acquired this two-year-old company as a wholly-owned subsidiary of Microsoft and part of the deal was that Bhatia continue to run Hotmail.

While it took America Online over six years to build up its customer base, Hotmail grabbed over 10 million subscribers in just two years. Bhatia is sworn to secrecy about the price-tag but according to analysts the figure could be anywhere between $300-400 million, a happy ending to a story which began with just two 20-somethings and an initial investment of $300,000. Had the company not been acquired, it would probably have gone public.

Says Bhatia: "What this really did for us is it helped expedite our vision for transforming our services from being just an e-mail service to a complete on-line service. We are really aspiring to be the AOL of the Web. We will be incorporating everything you find on AOL into our e-mail service. We have the advantage of being global, that's why we've grown so quickly."

The Hotmail story proves above all else that in the bold, emerging world of the Internet, the innovators and the risk-takers shall inherit the earth - and the big bucks.

TiE's Kanwar Rekhi: "We've become somewhat like proxy fathers. It's very satisfying -- the relationship is like a guru-chela relationship."

Silicon Valley is full of real life stories of Indian entrepreneurs who've ridden the Information Highway to big success. Who hasn't heard the story of Sanjay Kumar, President and Chief Operating Officer of Computer Associates International, the world's third largest independent software company and the world's largest business software company? A native of Sri Lanka, he started out writing software programming. In the three years that Kumar has been president, the value of the company's stock has tripled and its market capitalization grown from $6 billion to approximately $25 billion.

Then there's the case of Unni Warrier, co-founder of Cybermedia which has developed automated service and support technology for PC users, filling a deeply-felt need. The Cybermedia products - First Aid 98, UnInstaller, Oil Change and Guard Dog - have sold millions of copies and probably earned them the blessings of frustrated PC users.

Yet another micro-chips to riches story is that of Ashok Trivedi and Sunil Wadhwani, whose Mastech Corporation, a worldwide provider of Information Technology services, last year had revenues of $135.8 million. It is listed on the NASDAQ (MAST) with a total market capitalization of over $7,000 million and annualized

revenues of over $200 million.

There's also K.B. Chandrashekhar of Exodus, which provides Internet Data Centers for companies whose Internet presence is integral to their business success. The company is on the brink of going public and is the hottest company around.

Rajendra Vattikuti founded Complete Business Solutions Inc., a worldwide provider of information technology services, which has a market capitalization of nearly $370 million. Desh Deshpande, is the founder and former CEO of Cascade Communications, a multi-million dollar hardware company which he launched in the basement of his home. Sameer Arora started NetObjects, which was acquired by IBM last year. Sunil Paul and Mark Pincus, co-founders of FreeLoader, Inc, a company providing Web pages off-line, was purchased by Individual Inc., a division of Microsoft, for about $38 million last year.

Safi Qureshy, a Pakistani entrepreneur, who sold his AST computer company to Samsung last year, has formed the CEO Emeritus Group to help start-up companies in Southern California. He is also president of Southern California chapter of the Indus Entrepreneurs, a networking group.

The Information Highway is crowded with similar intrepid entrepreneurs who are racing to success and revolutionizing the way the world communicates and does business and a surprising number on the road are Indians. Accelerated Networks, which offers high speed Internet access products for Internet subscribers and the service providers -- CEO Suresh Nihalani; InterWeave Software, Inc. which produces end-user database access on the Web -- CEO Indra Mohan; Portable Software Corp. which offers web-based expense reporting software -- CEO Steve Singh. In fact, Indians are involved in virtually every aspect of the computer revolution.

Unni Warrier of Cybermedia, which has blessed PC users with First Aid, Uninstaller, Guard Dog, etc.

Increasingly many of them are graduating from the hardware and software sector to the Internet in big and small ways. For every risk-taker with ground-breaking ideas, there are thousands and thousands of Indians working as computer programmers and analysts in mainstream American companies or in body shops, crunching numbers and codes.

There are still others using the Web to create new businesses or improve existing ones, as countless India servers and websites prove. If you look at the Indian population of 1 million in the United States, one would expect fewer than 1 in 250 individuals in the hi-tech field to be Indian; but the actual percentage is much, much higher. Of 23,000 people at Microsoft, for example, according to Bhatia, an estimated 5,000 are Indians. According to some estimates, 30,000 Indians are involved in Silicon Valley technology companies

Roy Parshad, an entrepreneur who's been in Silicon Valley for 17 years, was most recently CEO of Castelle, a $30 million company which he's leaving to start another company. He is also the founder of P-Vad, which went on to become the largest PC-based design automation company.

Says Parshad: "The Internet is a very broad term and lots of Indian entrepreneurs are involved with it. People from India have traditionally excelled in software since the last 20 years, both here and in India, so it was a kind of natural fit to get into this domain and to participate in the Internet revolution. Indians are involved in both the software and the hardware ends of the Net. It is an area where we are making a big impact right now -- it doesn't require as much start-up capital as other areas of high technology do and Indians have done very well."

Indians are in the highest echelons of many top hi-tech companies like Microsoft and Netscape, such as Ram Sriram, vice president of sales for Netscape and Krishnan Natarajan, senior product manager at Netscape, which builds the core technology, like operating systems, browsers and access tools. Then there are the people who are creating services on the Internet such as the information data base, transaction or access, such as Yahoo's Shailaja Srinivasan. Network News wrote: "At the same time that the Internet was maturing from the pet project of university nerds to its present more general purpose form, Srinivasan was expanding Yahoo to be flexible enough to effectively chart the deluge of information."

Ashok Trivedi of Mastech Corporation, which amassed $136 million in revenues last year.

Over the years, Indian computer professionals have been the beneficiary of the success of the entrepreneurs who came before them and the result is The IndUS Entrepreneurs (TiE), a non-profit organization created by several successful entrepreneurs including Suhas Patil of Cirrus Logic. Today it has nearly 600 members and new chapters in Los Angeles and Boston. The president of TiE is Kanwar Rekhi., a semi-retired professional, who created many successful companies, including Excelan which merged with Novell.

According to Rekhi: "The whole idea is to network. We also educate, mentor and advise younger people -- it's a very positive thing. The whole notion is that in the old days in India the son learned the trade at the feet of his father. Not many sons can do that in computer entrepreneurship so we've become somewhat like proxy fathers. It's very satisfying - the relationship is like a guru-chela relationship." While Silicon Valley is full of venture capitalists who fund start-up companies, TiE also offers funding to entrepreneurs with ideas. Suhas Patil, Prabhu Goyal and Rekhi are some of the primary investors.

Observes Rekhi: "We are not farmer venture capitalists but rather angel investors, people who invest in start-ups at seed level and encourage entrepreneurs. This is not a charity and the investments usually work out very well." Some of the companies that TiE invested in are Cybermedia, which went public and has done extremely well and Exodus Communications, which is going to be a very hot IPO in the next few months.

Silicon India's Yogesh Sharma (left) and Harvi Sachar (right): No way to stay aloof from technology.

One interesting by-product of the Internet is Siliconindia, an information-packed magazine which was started a year ago by three young entrepreneurs -- journalist Yogesh Sharma, computer specialist Harvi Sachar and marketing professional Mona Sharma. Siliconindia carries everything from fact-filled articles and profiles of CEO's to the low-down on successful start-ups and bagging venture capital for new companies.

Says editor Yogesh Sharma: "It is about successful Indians around the world who are leading the world in technology and it covers the whole gamut." The magazine first appeared on the web and went into print in August and is now six issues old.

Sharma points out, "The world is becoming so technology-driven that there is no way people can afford to stay aloof from technology and still succeed."

Sachar adds, "Indians have done so well all over the world, but we don't really know each other. Our goal is to create a network of Indian professionals around the world."

While Indians are involved in the infrastructure of the Internet, many are benefiting from the new channels of cheap communication it has opened. The Internet is like the telephone now, a communication medium and anybody can communicate with anybody else, conduct business, advertise, sell or publish. It's broken barriers across countries and states and it's cutting out the middle man -- you can deal directly with businesses. It's a worldwide, global phenomenon and you can use it to conduct an international business deal or simply chat with grandma in Tamil Nadu.

Observes Parshad, who is a chronicler of the Internet age, "It's a very huge fundamental shift that is taking place and the wonderful thing about it is that all these communications are taking place at electronic speed, with images and graphics with several people involved. You can search through information, thousands and millions of terabits -- it's just mind-boggling the kind of space that is available on the Internet -- the content is doubling almost every two or three months. Two years ago the number of websites was just 400,000 -- now it's crossed 2 million."

"There's nothing in the history of civilization this side of Jesus Christ that has exploded this quickly."

He adds, "And the capabilities will only become more and more. The band width is the single biggest bottleneck; once this gets solved, then video-conferencing over the Internet will become common. This is an extraordinarily profound thing that's going on, very broad-based and with a very large number of participants and many opportunities around the world, especially in the U.S. Prices have dropped dramatically: Internet access costs just $20 a month, almost the same as phone service - and it took phone service a long time to get to that rate."

As the Internet infiltrates daily life, almost everyone from multimillion dollar businesses to frustrated would-be authors and obscure fanzines are getting on the netwagon. In the democracy of the World Wide Web, everyone has the power to be heard -- or deleted. Indians and India-related businesses have taken wholeheartedly to the Information Highway, be it an Indian restaurant, the Indian Consulate or Air India. Now you can obtain visa information, purchase an air-ticket or even check out the menu on a particular Air India flight on the web.

Small businesses are also putting the http://www prefix to their name and website designers are having a field day with the boom in business.

Tom Vellaringattu: India's Spice 'N Flavor's success is tied to the Internet.

Tom Vellaringattu is a Long Island entrepreneur whose success is tied to the Internet. His company, Ind-US Enterprises, has its own server and hosts two sites, Indias.com and Kerala.com. According to him, since Indias.com hosts the biggest Malayalee newspaper, Dipika, the site gets thousands of hits a day and he now has a database of 10,000 Malayalees worldwide.

Vellaringattu finds that both the sites have attracted many Indians and that's been a boon to his food business, promoting India's Spice 'N Flavor packaged spice blends from India, with the recipes on the website serving as a big draw. Each packet proclaims, "Please visit our Internet site."

More importantly, the website helps him make connections with interested distributors in different parts of the United States. Says Vellaringattu: "It's great for connections. I meet so many people that it's actually promoting my business. I'm meeting people from Russia, Japan, Hong Kong through the Net. When I travel to Europe next week, I am stopping in London, Paris, Basel, Zurich, Vienna, Cologne and Frankfurt. I'm staying everywhere with friends I met through the Net."

Another young entrepreneur who has used his creativity to profit from the Internet is New Yorker Kumar Kalantri. He and his two partners have bought a large loft space at 678 Broadway which serves as an art gallery, gathering place and also houses the Manhattan Internet Lounge where one can surf the net, check e-mail, chat online and do anything that is computer related for $10 an hour.

It has 200 MHz workstations coupled with a hi-speed T-1 Internet connection. This facility attracts many young techies especially from New York University which is just a stone's throw away.

Kalantri is also renting the facilities to the Learning Annex for classes and get-togethers related to the Internet. He's also created the Download CafŽ where computer buffs can get vegetarian snacks and drinks.

Recently the book Men Are From Cyberspace was launched at the Manhattan Internet Lounge and a series of singles events for cyberdaters are being planned here by authors of the book, Lisa Skriloff and Jodie Gould. Newbies will be taught how to surf for love at the computer stations during these events.

Not only are Indians in the United States involved with the Internet but back in India too, virtual immigrants are created in the body shops of Bangalore.

Says Parshad: "When a main industry takes off, there are a lot of after-industries or after-markets that happen as well. Just as General Motors builds cars but there is an industry surrounding GM which supplies a variety of things to them. In the same way with all the hardware and software development surrounding the Internet, there is a huge demand for people and good quality engineers are hard to find. In the last few years it's created a huge dearth of engineers and salaries and compensation have gone through the roof."

Time is of the essence in the frenetic hi-tech world where things seem to change by the minute. Observes Parshad, "When I started my first company we started it on $350,000 and now we are looking at five or six million dollars. Everything has to be done quickly, no expense must be spared, get out there quickly to the market. You're fighting for time. Just a few months lead time can make the difference between someone succeeding and failing. Those are the pressures of that scene. So body shopping is quite a natural thing because of the pool of talent available in India."

Sunil Paul and Mark Pincus of

According to the Bureau of Labor Statistics, between 1996 and 2006 more than a million new jobs involving software skills should be created and industry sources estimate that even now 200,000 to 400,000 computer jobs stand open. In fact, over the last two years hundreds of new companies have opened in Silicon Valley and there is a shortage of skilled programmers. The shortage is so pronounced that the Clinton Administration has announced $28 million in new initiatives to encourage training more programmers.

According to the Information Technology Association of America, the average programmer earned $58,200 in 1995 and $66,500 in 1996. So the prospects seem good for Indian Americans who have an aptitude for technical work. Technology companies are constantly scouring for talent all over the world.

As the New York Times noted, "But virtual immigration, where the workers stay put, has become far more common and remains much cheaper." It gave the example of I2 Technologies of Dallas which runs software development centers in Bombay and Bangalore, where software developers earn a third of their counterparts in the United States. All in all, the future of many Indians is linked to the Internet and high technology fields but not too many are willing to make the most of their opportunities.

Notes Sabeer Bhatia, "There is a very good system here which helps anyone who has a great idea. That's the great thing about Silicon Valley -- the infrastructure is right here but I see very few Indians making use of that."

"Indians in spite of being very smart and very skilled don't take as many risks as some of the other people here do. They are pretty satisfied with a secure job working for other companies. That trend needs to change. The best piece of advice someone gave to me was that the biggest risk in life is not to take a risk at all.